In 2022 TD released an updated Climate Action Plan in response to its commitment to achieve net zero financed emissions by 2050.

While TD’s updated Plan provides more clarity on the measurement of financed emissions, its intensity-based 2030 targets don’t align with the absolute 2050 target TD has committed to and the Plan lacks clarity as to the specific measures and policies that TD will implement to achieve progress. For example, TD discusses the existence of its “Climate Target Operating Model” with “sequences and actions,” but does not disclose what those are. Similarly, TD says that it continues to embed climate risk into its enterprise risk framework, but does not disclose whether and how this is related to meeting its targets. TD says that it is making good progress towards its $100 billion “low carbon” lending, financing, and asset management target, but it‘s unclear whether and how this relates to its emission reduction targets as TD does not systematically quantify and disclose the impact of this activity on emissions. TD’s need for a credible transition plan is acute considering the bank is particularly exposed to transition risk. A recent study concluded that TD has the highest financed emissions - at 447 million tonnes CO2 equivalent - of any Canadian bank. TD is yet to adopt any policy to phase down its exposure to fossil fuels, including in its updated 2022 coal policy. On the contrary, it is still involved with financing fossil fuel expansion projects such as the Trans Mountain pipeline and Coastal GasLink project.

This uncertainty about whether and how TD will meet its climate targets represents a material business risk given the shifting regulatory environment. The Office of the Superintendent of Financial Institutions is developing climate risk management guidance that will require TD to have a Climate Transition Plan to manage “increasing physical risks from climate change, and the transition towards a low-GHG economy.” Similarly, the Glasgow Financial Alliance for Net Zero, of which TD is a member, recommends that financial institutions have a transition plan that contains “a set of goals, actions, and accountability mechanisms to align an organization’s business activities with a pathway to net-zero.”3 TD is yet to meet this bar. TD’s peers disclose greater specificity regarding how they will reach net zero, including ́́absolute 2030 targets (BMO, Citi, Wells Fargo), fossil fuel financing reductions (Lloyds, BNP Paribas, ING, Societe General), and public disclosure regarding client net zero evaluation and progress (Credit Suisse, ANZ Group).This proposal is consistent with one filed and withdrawn by MÉDAC last year.

To address uncertainty and increase transparency, we urge shareholders to vote FOR this proposal.